Reports that Ukrainian troops have attacked an armed Russian aid convoy are making the rounds in the bond market midmorning Friday and have driven the 10-year Treasury yield sharply lower, into new record-low territory for 2014, with the note up 22/32 in price at latest check and yielding 2.320%, per Tradeweb data. The 30-year bond is yielding 3.112%.

The 10-year German bund yield is in record-low sub-1% territory, yielding 0.964%, per Tradeweb.

According to the Financial Times, leveraged loans classified single B by the credit rating agencies – a “speculative” investment – made up more than a third of new issuance last year. That is a bigger chunk than loans rated double B – just below investment-grade – that have lead this part of the capital markets.

The Dow Jones Newswires reports that more than 30 Chinese companies have scrapped plans to sell debt after the country witnessed its first domestic corporate bond default and authorities signaled they might let other struggling corporations meet the same fate.

According to Bloomberg, Treasury five-year notes were close to the cheapest level in four years relative to two- and 10-year securities before the U.S. sells $35 billion of 2019 debt today. Spanish and Italian government bonds rose as J.P. Morgan Asset Management said it increased bets that a rally is set to extend. And the wire service also reports that the People’s Bank of China plans to change the way it compiles the opening prices of benchmark money-market rates to help prevent manipulation.

The World Bank warns that the economic impact of annexing Crimea from Ukraine could drive Russia into a sharp recession this year even if the West stops short of trade sanctions, Reuters reports.

Investors are fretting after Yellen signaled that the federal funds rate could climb as soon as April 2015. The Wall Street Journal’s E.S. Browningdug into that yesterday. But economics writer Jon Hilsenrath writes that Wall Street may be missing bigger news.

Are the days of huge stock buybacks coming to an end? Marketwatch’s Wallace Witkowski writes that buybacks may begin to lose their luster for investors as an earnings booster as the end of cheap debt nears and fundamental growth gets more scrutiny.

While S&P and Fitch Ratings consider whether Russian President Vladimir Putin’s military incursion into Ukraine warrants a sovereign downgrade, the cost to insure the government’s debt against nonpayment has climbed to a 10-month high, according to Bloomberg. The news service reports that sanctions imposed by the U.S. and the European Union are pushing Russia toward a recession. Also, Bloomberg writes that overseas creditors’ grip on U.S. Treasuries have fallen to their lowest level in a decade with U.S. investors picking up the slack.

Financial markets in the U.S. are already apparently over the whole fear-of-war thing. As tensions between Russia and the Ukraine seem to have eased, yesterday’s risk-off day of caution has given way to yet another risk-on rally, with stocks up sharply Tuesday and bond prices down. The 10-year Treasury note is currently down 15/32 in price, lifting its yield to 2.664%, and the 30-year bond is down 26/32 to yield 3.603%, per Tradweb data.

The iShares 20+ Year Treasury Bond (TLT) is currently down 0.9% on the day at $108.07.

The Finance Ministry said it pulled the sale due to unfavorable market conditions, according to a statement on its website today. The yield on Russia’s ruble debt due February 2027 surged 52 basis points yesterday to the highest since June 2012. It declined 17 basis points to 8.71 percent as of 3:51 p.m. in Moscow after President Vladimir Putin said there’s no immediate need to send troops to Ukraine….

The ruble was the worst-performing currency worldwide yesterday after troops took control of the Crimean peninsula, where Russia keeps its Black Sea fleet, amid escalating tensions in Ukraine. The Finance Ministry axed bond sales ahead of schedule on Jan. 28 and Feb. 4 as appetite for developing-nation assets soured after the Federal Reserve cut monetary stimulus. The ministry canceled debt sales on the day of the auction Feb. 19.

Junk bonds continue to defy gravity and mathematics, soaring through the first two months of 2014 with a 2.76% return, even though the market entered the year yielding just 5.6%. That average yield is down to 5.2% now, and the average junk-bond price is up to 104.9 cents on the dollar, with an average spread over Treasuries of 3.81 percentage points, a fresh post-crisis low.

I’ve gone hoarse over the past year warning at various times how the market-s Fed-fueled run has pushed it into dangerous, uncharted territory, namely when the market’s average yield briefly fell below 5% last May, but after junk bonds sputtered last summer they recovered to end 2013 up 7.4%, after gaining more than double that the year before.

So I’ll say it again: this can’t go on forever, and this all depends on ultra-low interest rates, which allow junk-rated companies to refinance their debts indefinitely while pushing investors into riskier types of bonds. Read my latest Current Yield column for a discussion of how credit risk is bound to rear its head eventually, and check the latest news on the escalating tension between Russian and the Ukraine to see exactly what sort of global upheaval tends to hurt risky assets like junk bonds.

It’s a safe-haven kind of day so far Monday, with escalating tensions between Russia and Ukraine sending investors in the direction of Treasury bonds. The early read on the 10-year Treasury note shows a yield of 2.61%, per Tradeweb data, down from 2.65% at the close of business Friday.

Tempering the bid for Treasuries a little bit is some stronger-than expected reading on personal spending in January, although December’s figure was revised lower.

Here’s Adrian Miller of GMP Securities with his take on the day and week ahead:

In the U.S. despite the geopolitical headlines there are important data points via January personal income and spending, February ISM manufacturing PMI and January construction spending. The data will continue to shape the Fed narrative as to any possible change in policy. Of course should the Ukrainian crisis escalate and the impact does display contagion characteristics the situation could result in the Fed pausing in its taper if the global economy and financial markets increasingly weaken.

The upheaval in Ukraine has created headaches for some big emerging-markets bond investors, but that’s not stopping other opportunistic investors from buying lately. Matt Wirz and Katy Burne report in today’s Wall Street Journal that some investors pounced as Ukraine’s bond prices rebounded from 78 cents on the dollar to 84 cents last week, while others have faced steep losses:

The uncertainty highlights the challenges facing emerging-markets investors amid uneven global growth and political flare-ups from Venezuela to Bosnia to Brazil. Many seek to deliver high yields by buying out-of-favor investments, most notably Ukraine’s largest bondholder, Franklin Templeton Investments.

Because of the low-interest- rate policy of the Federal Reserve, “even to preserve one’s wealth, one has to take risk,” Michael Hasenstab, Franklin Templeton’s global-bond-fund manager, said in a promotional video posted in January on the firm’s website. “Our job is to really identify which risks we think we’re getting compensated for and which risks we think are not worth taking.”

Franklin Templeton held $7 billion of Ukraine government bonds at the start of the year. The market value of the firm’s holdings fell $522 million through Feb. 19, according to data from Ipreo and FactSet.

The key question facing investors is whether the political upheaval could force Ukraine into some sort of debt restructuring. The story cites an S& P estimate that Ukraine must spend $13 billion to service its foreign-currency debt this year, while the country’s international reserves fell to $17.8 billion in January from $20.4 billion in December

Amey Stone is Barron’s Income Investing blogger and Current Yield columnist. She was formerly a managing editor at CBS MoneyWatch, MSN Money and AOL DailyFinance. Her responsibilities included overseeing market coverage and personal finance topics. Prior to those roles, she was a senior writer at BusinessWeek where she authored the Street Wise column online and contributed to the magazine’s Inside Wall Street column. Topics covered included economics, corporate finance, Fed policy, municipal bonds, mutual funds and dividend investing. She co-authored King of Capital, a biography of Citigroup Chairman Sandy Weill. She is a graduate of Yale University and Columbia University’s Graduate School of Journalism.